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Packard Foundation to vote on merger

Board members convene on Friday to decide on Compaq deal

The fate of the Compaq/Hewlett Packard (HP) deal could be decided on Friday when the David and Lucille Packard Foundation's members gather to debate whether or not to back HP's acquisition proposal.

Between them the Foundation's 12 board members hold the largest share of HP stock, amounting to 10.4 per cent or effectively 201 million shares.

Although the Foundation's decision will not ultimately be a deciding vote, it is expected that its position could sway other shareholders' decisions.

Foundation trustee Cole Wilbur, who held the post of chief executive for 23 years, was unable to give much insight into how the decision would go.

He explained that there was not an overall mood in favour of going one way or the other. "People realise this is our responsibility. It's important for us to continue thinking about what's the best thing for the Packard Foundation," he said.

George Vera, the Foundation's chief financial officer, said: "It's very much a business decision from our perspective."

The members, which include three daughters of David and Lucille Packard, have between 7 December and early January to make their final decision, although insiders say there is a 50-50 chance that the board will look to make a decision on Friday. The board's final vote does not have to be publicly announced.

The Foundation was set up 37 years ago by the Packards and established on the basis of changing the world through philanthropic acts. Its members will no doubt be casting their votes while bearing in mind the Foundation's future grant making abilities.

Over the last 12 months the decline in HP's market value has hit the Foundation's assets. It once controlled an endowment of $13bn that has now dwindled to roughly $5bn.

Harvey Dale, director of the National Centre on Philanthropy and the Law in New York City, said that the Foundation "always has two choices: one is you sell your stock and buy something else; another is to take action to oppose that which is injuring the price of stock".